Pharmaceutical companies lose wage and hour lawsuit

Two pharmaceutical companies, Novartis Pharmaceuticals and Schering Corp., were dealt a blow in a federal wage and hour lawsuit that challenged federal overtime law. The United States Supreme Court denied the drug companies’ petition to review a ruling made by the United States Court of Appeals for the Second Circuit, which is a federal appeals court that has jurisdiction over the federal district courts of New York, Connecticut and Vermont. The U.S. Court of Appeals for the Second Circuit ruled that drug company sales representatives were covered by federal overtime laws.

The Second Circuit Appeals Court found in two separate rulings in July 2010 that drug company sales representatives were covered by federal wage and hour law. The U.S. Supreme Court’s decision to deny review of the two decisions is an implied victory for drug sales representatives across the country. A federal district court judge initially ruled two years earlier that sales people were not entitled to overtime coverage under the federal wage and hour law because they fell within the outside sales and administrative exemptions to the federal overtime requirements. The Second Circuit Appeal Court overruled that decision.

In a statement commenting on the U.S. Supreme Court’s decision to deny review, a lawyer representing the drug company sales reps said the decision to deny review is a victory for thousands of drug representatives who work more than 70 hours per week and were denied overtime pay that was deserved. The attorney went on to say that the defendant drug companies should institute a new policy that immediately reflects the overtime compensation that drug sales representatives deserve.

Source: Courthouse News Service, “Drug companies suffer a blow to overtime policies,” 2/28/11

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